Mercosur agreement: EU finally clears the way

Historic agreement after 25 years

The path for the EU free trade agreement with the South American Mercosur countries is clear. At a meeting in Brussels, a sufficient number of representatives from the 27 EU member states gave the green light for the planned signing of the agreement. The German Press Agency learned this from diplomatic circles.

The agreement marks the provisional end of a marathon of negotiations that began back in 1999. Since then, differing interests within the EU - particularly with regard to agriculture and consumer protection - have repeatedly delayed the conclusion.

The plan is to largely eliminate tariffs and trade barriers between the EU and the Mercosur countries. The EU Commission speaks of the largest free trade zone in the world with over 700 million inhabitants.

Economic hopes

The EU Commission hopes for massive economic stimuli from the agreement. Annual EU exports to South America could increase by up to 39 percent - an increase of about 49 billion euros. According to estimates, this could support over 440,000 jobs across Europe.

Industries such as the automotive industry, mechanical engineering, and the pharmaceutical industry are expected to benefit significantly. Currently, tariffs on car imports to the Mercosur countries are around 35 percent - a significant market barrier that is now expected to fall.

Concessions to the agricultural lobby

The breakthrough in Brussels was due in no small part to additional concessions to the European agricultural lobby. This group had sharply criticized the planned free trade zone. In particular, competition from South America in agricultural products such as beef is seen as a threat to European producers.

In countries like Brazil or Argentina, agricultural products can be produced much more cheaply than in Europe. The result: fears of a ruinous price war and a decline in competitiveness in the EU internal market.

Italy had long withheld its approval and tied it to further support commitments for European farmers. Only when these were met did the necessary majority in the EU Council come about. France and Poland continue to reject the agreement - thus Italy's approval was crucial.

Security mechanisms for agriculture

To address the concerns of agriculture, additional economic safeguard clauses were integrated into the agreement. These allow for quick countermeasures in the event of a harmful increase in imports from the Mercosur states or an excessive price decline for EU producers.

Specifically, this means: tariff advantages can be temporarily suspended if European markets come under pressure.

Particularly intensive monitoring is planned for sensitive products such as beef, poultry, rice, honey, eggs, garlic, ethanol, citrus fruits, and sugar. The impact of imports should be documented and assessed in a report at least every six months.

Critical voices and environmental concerns

Despite the economic benefits, the agreement remains controversial. Critics warn that European farmers could come under strong price pressure due to cheaper imports. There are also fears that the deal could have negative impacts on environmental standards - for example, through an increase in deforestation in South America.

Food safety is also a central issue in the debate. Critics see the risk that the EU's strict standards for animal and plant protection could be undermined.

The EU Commission rejects these concerns. It emphasizes that only products that comply with European regulations may continue to be imported.

DIHK calls for commitment to Mercosur agreement

The discussion about the EU-Mercosur agreement is intensifying: while the signing is imminent, the DIHK urgently warns against failure - a wake-up call for Europe's economic policy.

Stefan Weinzierl

Political signal effect

The agreement has not only economic but also geopolitical significance. The new free trade zone is intended to send a signal against the protectionist tariff policy of US President Donald Trump.

The smoldering trade dispute with the USA had recently given new momentum to the agreement. Several member states - led by Germany - see the agreement as a clear commitment to free trade.

Timeline and next steps

The signing of the agreement is now planned in Paraguay, which currently holds the rotating presidency of the Mercosur bloc. For the EU, Commission President Ursula von der Leyen and Council President António Costa are to travel to South America.

For the final conclusion, a written decision by the EU is still necessary - however, this is considered a mere formality.

Another player in the background: Bolivia, which has now also joined the Mercosur bloc, but cannot yet derive any concrete benefits from the agreement. Beforehand, national regulations must be adapted to the agreements.

With material from dpa